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Program Income

About this Policy

Program Income

Policy Number: 27019

Effective Date:
Dec 12, 2017

Last Updated:

Responsible Office:
UM System Controller’s Office

Responsible Administrator:
UM System Controller

Policy Contact:

Campus Sponsored Programs Office


  • Finance

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This policy provides guidance concerning recording and processing Program Income.

Reason for Policy

The purpose of this policy is to outline proper recording, reporting, spending and management of Program Income to ensure compliance with federal guidelines.

Policy Statement

The University of Missouri receives income from entities other than the sponsor on certain Awards resulting from work performed on that sponsored Award.  This income constitutes Program Income. 

Accounting for Program Income may use one of three methods depending on the guidelines pertaining to the Award (addition, deduction, or cost sharing).

  • Addition:  Program Income funds may be added to the federal award, and must be used for the to accomplish the award objectives.
  • Deduction: Total funds available to the project remain the same and the funds generated through Program Income are used to reduce the financial commitment of the sponsor.
  • Cost Sharing: With prior approval, Program Income may be used to meet the cost sharing or matching requirement of the project.

Unless otherwise specified by the Federal Awarding agency, the "addition" method must be applied.  If there is any Program Income in excess of amounts specified, the excess must be deducted from the expenditures.

Unless specifically outlined in the contract or grant, the Awardee shall have no obligation to sponsoring agencies for Program Income received after the end of the period of performance for the Award.

Program Income Setup
Information on the type of Program Income and the proposed treatment of the income is submitted to the campus SPO along with the proposal. The request for the Program Income fund and project should be processed along with the request to establish the Award. The review, approval and documentation authorize the Program Income and its treatment.  In those instances where the need for a Program Income ChartField string is identified after the project has begun, the SPO Post-Award Manager may create the Program Income ChartField string.  If Program Income is anticipated, a separate ChartField string and budget for Program Income should be requested.

Expending and Monitoring
Department administrators/fiscal officers must monitor expenses in the Program Income project to ensure expenses charged to the Program Income ChartField string must be allowable, allocable, and reasonable in relation to the activity supported by the sponsor. Unless otherwise specified in the Award document, restrictions on expenditures of Program Income are identical to restrictions on expenditures for the related project.  The PI responsible for the sponsored project that produced the Program Income is responsible for ensuring that Program Income funds are used for appropriate project-related costs.  Departmental personnel will process and record charges to Program Income ChartField strings per sponsor terms and conditions along with University policy and procedures. The SPO accountant will monitor the Program Income ChartField string during the life of the Award to ensure that Program Income is being spent appropriately.

The amount and disposition of the Program Income must be reported on the Financial Status Report of the parent Award for each applicable budget period. During Award setup the SPO must document the treatment of any Program Income and disposition at the end of the Award. Final disposition of unexpended Program Income will be made upon termination of the sponsored project. When the related sponsored project ends, the SPO accountant closes the Program Income ChartField string along with the parent Project ChartField string, unless the sponsor or the terms and conditions of the Award state otherwise.

Financial Status Reports are prepared by the SPO accountants based on the terms and condition of the Award.  These reports are reviewed and approved by the SPO Post-Award Manager. This review is evidenced by the SPO Post-Award Manager’s signature on the report. The manager’s signature also attests to of OMB compliance and the accuracy of the accounting treatments.


Award - funds provided by a sponsor to pay expenses of a specific project.

ChartFields - a PeopleSoft application field that stores the University’s chart of accounts and provides a basic structure to segregate and categorize transactional and budget data.  Fund, DeptID, Class, Program, and Project ChartFields comprise the ChartField string for tracking Award costs.

Program Income - gross income earned by the recipient that is directly generated by a support activity or earned because of an Award. It includes but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally funded projects, the sale of commodities or items fabricated under an Award, license fees and royalties on patents and copyrights, and interest on loans made with Award funds. Interest earned on advances of federal funds is not Program Income.  Except as otherwise provided in Federal Awarding agency regulations or the terms and conditions of the Award, Program Income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on them.


Campus Sponsored Program Office:

  • Review proposal for anticipated Program Income.
  • Report Program Income to sponsor in financial reports
  • During Award setup, document the treatment of Program Income to be at Award closing.
  • Address Program Income balance issues at final project termination
  • Monitor Program Income balances during the life of the Award to ensure the Program Income is being spent.
  • Perform a managerial review of the Program Income fund balance and transactions quarterly.

Department Administrator/Fiscal Officer:

  • Reconcile revenue invoiced or submitted against financial reports.
  • Monitor levels of Program Income in the project and any limits that are set by the sponsor.
  • Monitor expenditure levels in project to ensure that Program Income is spent first.
  • Ensure that cash receipts are deposited in accordance with the cash policies.

Principal Investigator:

  • Identifies sources of and potential Program Income
  • Ensures that all received for Program Income are deposited into the appropriate sponsored program ChartField string.
  • Spends Program Income in accordance with sponsor requirements and the terms and conditions of the Award not exceeding the income received.
  • Monitor expenditure levels in project to ensure that Program Income is spent first.

Additional Details



Related Information



Formerly Accounting Policy Manual 60.60 – Program Income (effective 12/31/2007)


Reviewed 2017-12-06